U.S. personal income continues to move higher despite the ongoing economic disruptions and unemployment caused by COVID-19. Real disposable personal income (inflation adjusted) was up 11.4 percent in January compared to December (Figure 2). Personal income consists of total earnings due to wages, investments, and other ventures. Spikes in personal income are evident in March of last year and January of this year due to the stimulus payments provided in the COVID-19 assistance packages.
Taxpayers received $1,200 per person in the first relief package, and $600 per person in the second one. For persons who did not lose a job, the vast majority, the assistance simply boosted income. It appears most people deposited the increased income into savings. The Economist reports that excess savings reached $1.6 trillion last month.
Figure 2. Total. U.S. Real Personal Income
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